Outten & Golden: Empowering Employees in the Workplace

Archive for the ‘Public Workers’ Category

Should a firefighter or police officer be paid more than minimum wage?

Friday, July 13th, 2012

Mark E. AndersonI do not live in Scranton, Pennsylvania, nor do I know the political leanings of the mayor or the city council; however, I do know that their actions, cutting the wages of city employees to minimum wage, are shameful. By the way, that wage cut applies to firefighters and police officers as well as a myriad of other city employees.

The employee’s unions are fighting back and are taking the city to court:

The trio of unions – International Association of Firefighters Local 60, the Fraternal Order of Police E.B. Jermyn Lodge 2 and the International Association of Machinists and Aerospace Workers Local Lodge 2305 – expect to soon file several new legal actions, said their attorney, Thomas Jennings. Those actions would include:

  • A motion in Lackawanna County Court to hold the mayor in contempt, due to paying 398 city employees minimum wages in their paychecks Friday, even though a judge on Thursday and Friday ordered full wages.
  • A lawsuit in U.S. District Court in Scranton under the Fair Labor Standards Act alleging the city has failed to pay wages on time and failed to pay overtime.
  • Another federal complaint alleging violations of the Heart and Lung Act, because benefits of disabled police and firefighters also were cut to minimum wages without first having a required hearing.
  • A penalty petition with the state workers’ compensation commission over the minimum wages.

“Pick a law. They violated it,” Mr. Jennings said.

The city is claiming that it had no choice as it only has $133,000 in cash on hand as of Monday but owed $3.4 million dollars to vendors, not including employees:

A payroll every two weeks amounts to $1 million, officials said. To free up cash to pay overdue bills, particularly health coverage, the mayor on June 27 announced he was indefinitely cutting salaries of all non-federally funded employees to the federal minimum wage of $7.25 an hour. This way, the payroll every two weeks would amount to $300,000, though [the mayor] pledged to pay all back wages once the crisis is resolved.

Sure, he will pay the workers back once the crisis is resolved, and I bet while he is at it he will toss in some oceanfront property in Arizona and a bridge in Brooklyn.

Now, of course if you go through the comments sections on any news story about the goings on in Scranton you will find that they are, unfortunately, quite typical these days. Those fatcat public employees and their unions are all to blame for Scranton’s and the nation’s woes. Yep, that cop who at 3:00 am is chasing down a guy who just robbed someone’s house is the problem. The firefighter who pulled a sleeping child out of a burning home is the problem. That guy over there who tests the tap water to make sure it is clean and safe to drink; it is his fault that Scranton and the nation as a whole is broke.

This blog originally appeared in Daily Kos Labor on July 11, 2012. Reprinted with permission.

About the Author: Mark Anderson, a Daily Kos Labor contributor, describes himself as a 44 year-old veteran, lifelong Progressive Democrat, Rabid Packer fan, Single Dad, Part-time Grad Student, and Full-time IS worker. You can learn more about him on his Facebook, “Kodiak54 (Mark Andersen)”

Will Public Workers and Immigrants March Together on May Day?

Friday, April 29th, 2011

david baconOne sign carried in almost every May Day march of the last few years says it all: “We are Workers, not Criminals!” Often it was held in the calloused hands of men and women who looked as though they’d just come from work in a factory, cleaning an office building, or picking grapes.

The sign stated an obvious truth. Millions of people have come to the United States to work, not to break its laws. Some have come with visas, and others without them. But they are all contributors to the society they’ve found here.

This year, those marchers will be joined by the public workers we saw in the state capitol in Madison, whose message was the same: we all work, we all contribute to our communities and we all have the right to a job, a union and a decent life. Past May Day protests have responded to a wave of draconian proposals to criminalize immigration status, and work itself, for undocumented people. The defenders of these proposals have used a brutal logic: if people cannot legally work, they will leave.

But undocumented people are part of the communities they live in. They cannot simply go, nor should they. They seek the same goals of equality and opportunity that working people in the United States have historically fought to achieve.  In addition, for most immigrants, there are no jobs to return to in the countries from which they’ve come. The North American Free Trade Agreement alone deepened poverty in Mexico so greatly that, since it took effect, 6 million people came to the United States to work because they had no alternative.

Instead of recognizing this reality, the U.S. government has attempted to make holding a job a criminal act. Thousands of workers have already been fired, with many more to come. We have seen workers sent to prison for inventing a Social Security number just to get a job. Yet they stole nothing and the money they’ve paid into Social Security funds now subsidizes every Social Security pension or disability payment.

On May Day in 2007, immigrants and their supporters marched through the streets of Kennett Square, Pa., a small town where thousands of immigrant workers labor in sheds growing mushrooms. The march was organized by the Farm Worker Support Committee (CATA) and many workers came from the only union shed, Kaolin Farms.   (Photo copyright David Bacon)

On May Day in 2007, immigrants and their supporters marched through the streets of Kennett Square, Pa., a small town where thousands of immigrant workers labor in sheds growing mushrooms. The march was organized by the Farm Worker Support Committee (CATA) and many workers came from the only union shed, Kaolin Farms. (Photo copyright David Bacon)

Undocumented workers deserve legal status because of that labor—their inherent contribution to society. Past years’ marches have supported legalization for the 12 million undocumented people in the United States. In addition, immigrants, unions and community groups have called for repealing the law making work a crime, ending guest worker programs, and guaranteeing human rights in communities along the U.S./Mexico border.

The truth is that undocumented workers and public workers in Wisconsin have a lot in common. In this year’s May Day marches, they could all hold the same signs. With unemployment at almost 9%, all working families need the Federal government to set up jobs programs, like those Roosevelt pushed through Congress in the 1930s. If General Electric alone paid its fair share of taxes, and if the troops came home from Iraq and Afghanistan, we could put to work every person wanting a job. Our roads, schools, hospitals and communities would all benefit.

At the same time, immigrants and public workers need strong unions that can push wages up, and guarantee pensions for seniors and healthcare for the sick and disabled. A street cleaner whose job is outsourced, and an undocumented worker fired from a fast food restaurant both need protection for their right to work and support their families.

Instead, some states like Arizona, and now Georgia, have passed measures allowing police to stop any “foreign looking” person on the street, and question their immigration status. Arizona passed a law requiring employers to fire workers whose names are flagged by Social Security. In Mississippi an undocumented worker accused of holding a job can get jail time of 1-5 years, and fines of up to $10,000.

The states and politicians that go after immigrants are the same ones calling for firing public workers and eliminating their union rights. Now a teacher educating our children has no more secure future in her job than an immigrant cleaning an office building at night. The difference between their problems is just one of degree.

But going after workers has produced a huge popular response. We saw it in Madison in the capitol building. We saw it in the May Day marches when millions of immigrants walked peacefully through the streets. Working people are not asleep. Helped by networks like May Day United, they remember that this holiday itself was born in the fight for the 8-hour day in Chicago more than a century ago.

In those tumultuous events, immigrants and the native born saw they needed the same thing, and reached out to each other. This May Day, will we see them walking together in the streets again?

For information about where May Day marches are scheduled to take place this Sunday, visit the May Day United website.

About the Author: David Bacon is a writer, photographer and former union organizer. He is the author of Illegal People: How Globalization Creates Migration and Criminalizes Immigrants (2008), Communities Without Borders (2006), and The Children of NAFTA: Labor Wars on the US/Mexico Border (2004). His website is at dbacon.igc.org.

This blog originally appeared In These Times on April 28, 2011. Reprinted with Permission.

Attacking Wisconsin’s Middle Class

Thursday, March 3rd, 2011

Image: Linda MericMedia coverage of Madison’s thousands of demonstrators has focused on Governor Scott Walker’s attempt to strip public employees of collective bargaining rights.  Members of 9to5, Association of Working Women have stood with those calling for fairness for working families.  But it’s clear that governor and conservative state legislators’ agenda is bigger than just union busting.  To benefit their corporate masters, they are determined to deny the American Dream to the vast majority of Wisconsinites.

Public workers don’t make big bucks but they are the backbone of the middle class.  They are teachers who tutor struggling students so they’re prepared for college, vocational school or a trade.  They are police and firefighters who protect us when the unthinkable happens.  They are nurses who vaccinate children so we no longer have polio and diphtheria epidemics.  They are $9.00/hour home health care workers helping individuals live in their homes with dignity.  They keep the economy humming by paying their mortgages, buying groceries and purchasing clothes items that keep our Main Street small businesses afloat.

Throughout the years, public employees and their unions have accepted lower paychecks to defer money to their pensions and health care.  Despite this, they’ve agreed to wage and benefit concessions to help do their share in balancing the state budget.

In sharp contrast to their “jobs, jobs, jobs” campaign promises, Wisconsin Republicans are pushing tax breaks to corporations and the rich that will decimate the state’s budget revenue.  To pay for their millionaire friends’ favors, they propose to cut already stretched-thin funding for education, police, firefighters and human services, all provided by public employees.

In a now-public recorded call to Gov. Walker in which a journalist pretended to be anti-union billionaire David Koch, the men discuss plans to threaten public workers with layoffs, attempts to divide public and private sector unions, and their hope that their anti-union efforts could spread nationwide.

Let’s be clear: This showdown is NOT about balancing the state budget.  It’s about union busting, pure and simple.  The upshot of these efforts is to take away power and family-supporting jobs from working families.

Meanwhile, Gov. Walker and allied legislators have launched other attacks on all working families in both the public and private sectors.  Their budget gives themselves the power to slash health care – a key middle class support – for the 1.1 million Wisconsinites relying on Medicaid.

They’ve proposed rolling back Wisconsin’s Family and Medical Leave Act.  Employees working less than 25 hours per week would no longer be eligible for family leave, and employers could deny the use of accrued sick time to cover lost pay.  Many would be forced to take unpaid leave for emergencies, putting their homes, families and even their jobs at risk.

In an end run around Milwaukee’s paid sick days policy, passed by 70% of that city’s voters in 2008, these legislators have introduced a bill to prevent municipalities from enacting paid sick days laws.

Proponents of these measures suggest they’re needed to boost industry and jobs but Wisconsin’s biggest companies are thriving, even through the recession.  Mercury Marine reported profits of $1.1 billion between 2000-2007 while paying nothing in state corporate income taxes.  Harley-Davidson’s profits have increased – profits The New York Times documented as “…mostly going to shareholders instead of the broader economy.”  Nevertheless, hearing the mantra of “you’re lucky to have jobs,” Harley workers were forced to take pay cuts.

The Governor and allied legislators are pulling the rug out from under middle class families because they want to bust unions and strip hard-won protections like health care, family leave and paid sick days from workers to enrich their corporate campaign contributors.

It’s time for people across Wisconsin and the nation to stand up for working families against policies that would degrade their pay and security.

About the Author: Linda Meric is the Executive Director of 9to5, National Association of Working Women, a national membership-based organization of low-income women working to improve policies on issues that directly affect them.

The Truth About Public Employees, the New Convenient Scapegoats

Thursday, January 20th, 2011

kari-lydersenIt’s become a common refrain: public employees from teachers to parking meter attendants to firefighters to nurses are bleeding state and local budgets dry with exorbitant wages and pensions.

As recent news reports and communiqués by conservatives have pointed out, a portion of public sector employees do earn what many middle- and working-class Americans would consider very generous wages and benefits. USA Today reported that on average, public workers earn $11.90 more per hour than comparable private sector workers.

But such numbers constitute misleading propaganda, according to labor analysts and proponents and several recent studies, including an April report by the Center for State and Local Government Excellence and the National Institute on Retirement Security (NIRS). “At its heart,” Amy Traub wrote in the The Nation in July, scapegoating of public employees is an insidious way to divide public and private sector workers who share many of the same interests.”

The NIRS study noted that when education and work experience are considered, state and local employees earn 11 to 12 percent less than comparable private sector workers; and their compensation is still lower when their benefits plans are figured in (6.8 percent lower for state workers and 7.4 percent lower for local workers).

The study notes that while public employees may appear to earn more than their private sector cohorts (for example in Michigan), when their education is considered they are actually earning less than they theoretically could on the private market. The study found 23 percent of local and state workers have college degrees, compared to only 16 percent of all federal workers.

The average state worker appears to earn more only because the state hires more of those in the highly educated categories that tend to earn more, not because workers with the same education earn more in the public sector.

When public employees do earn high wages and receive great benefits, rather than engendering resentment and jealousy, labor proponents say, these should be held up as examples of the security and quality of life that all working people should enjoy, whether in the public or private sector.

Although a small percentage of public sector salaries may be relatively high, they are doubtless still only a drop in the bucket compared to federal spending on defense, state tax breaks to corporations and the like.

Former Labor Secretary Robert Reich recently opined:

Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers…It’s far more convenient to go after people who are doing the public’s work – sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets.

The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.

Public employees do periodically make headlines for gaming the system – collecting two pensions simultaneously, collecting a pension while still working a public job, or getting a “promotion” immediately before retirement to boost their pension, for example.

But Reich notes that such pension exploitation is a relative rarity, and most public employees are lucky to collect modest pensions that don’t even cost much to taxpayers. An average government worker who retires with a salary of $45,000 will collect a $19,000-a-year pension, he says—“few would call that overly generous.”

While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 [percent] of their pay into the Social Security fund as private employers would.

CalPERS, the California Public Employees’ Retirement System, describes the reality for California public employee pensions, on a “myth busting” website addressing common misconceptions—including the idea that “public pension benefits are excessive and a drain on the public.”

The average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $16,000 per year or less in benefits. Unlike the private sector, many CalPERS members do not receive Social Security, making their CalPERS pension their sole source of pension income, other than savings.

The site also says that: “California public retirees put back $2 into the economy for every $1 they receive in pensions.”

Many Republicans argue that even granting collective bargaining rights to public sector employees is a recipe for financial disaster and endangers the public. Nevada, North Carolina and Arizona are among the states that don’t allow collective bargaining for government employees. Labor advocates argue there’s no reason a right enshrined in labor law and guaranteed to private sector workers should be denied to dedicated public employees. If the right to strike endangers public welfare in any way – for example among firefighters or police officers – they can still be allowed collective bargaining rights with some of the same strike-related caveats that affect workers in private industries from transportation to healthcare.

The NIRS “Out of Balance” study concludes:

Although the current recession calls for equal sacrifice, the long-term pattern indicates that state and local workers are not, on average, overcompensated. If the goal is to compensate state and local sector employees in a manner comparable to those in the private sector, the data do not call for reductions in state and local wages. If anything, they call for increases.

An organization called Brave New Foundation has collected stories of public employees facing layoffs and wage freezes, describing the effect on their own lives and on citizens who need their services. A blogger on the site NewsHound reported:

It absolutely infuriates me the way the right wing is trying to demonize – in an effort to cut back benefits of public workers at the same time that they demand a giant windfall from the public by way of tax cuts for the wealthy.

This post was originally published on Working In These Times.

About the Author: Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist writing for publications including The Washington Post, the Chicago Reader and The Progressive. Her most recent book is Revolt on Goose Island.

Martin Luther King Jr. Gave His Life Supporting Workers’ Rights

Monday, January 17th, 2011

Image: James ParksMartin Luther King Jr., whose birthday we celebrate this weekend, died fighting for the freedom of Memphis sanitation workers to form a union with AFSCME. For King, economic justice went hand in hand with civil rights and the right to join a union was critical to gaining economic justice.

Writing on AlterNet, Laura Flanders says:

King saw public workers as the first line of defense. That’s why he went to Memphis to stand by striking sanitation members of AFSCME, the public workers’ union. In his view they led the way in the fight for fair pay and benefits…and in the fight for dignity for those who shovel our snow and clean our streets.

Read her full column here. Read about the AFL-CIO’s 2011l King Day celebration here and here.

King also recognized that the anti-union politicians in the South were the same people who opposed civil rights for all Americans. That’s why he opposed union-busting ”right to work” for less laws. In fact, in 1961, he said:

In our glorious fight for civil rights, we must guard against being fooled by false slogans, as “right-to-work.” It provides no “rights” and no “works.” Its purpose is to destroy labor unions and the freedom of collective bargaining….We demand this fraud be stopped.

This article was originally published on AFL-CIO Now Blog.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections.

Puerto Rico's working families to appeal Governor's massive layoffs

Wednesday, December 8th, 2010

Image: Kate ThomasIn July 2008, Republican Governor of Puerto Rico Luis Fortuño enacted Law 7 in a two-day period. He then invoked the law in 2009, effectively firing 28,000 employees across all sectors of public services–and all without demonstrating any alternative solutions or proving financial necessity.

As a direct result of Law 7, thousands of working people who provide essential services in education, healthcare, the environment, and social services in Puerto Rico have lost their livelihoods, while the Commonwealth citizens have endured a dramatic loss of essential services.

Today at the U.S. Court of Appeals for the First Circuit (located here in Boston, MA), 28,000 working families throughout Puerto Rico represented by lead plaintiffs from the Central Federation of Workers (UFCW), the Office and Professional Employees International Union (OPEIU), the Service Employees International Union SPT 1996 (SEIU) and the United Auto Workers (UAW) will hear opening arguments.

This article was originally published on SEIU.org.

For more information regarding this case, you can contact Meghan Finegan at [email protected]

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.


Public Employees Under Attack

Wednesday, October 13th, 2010

Image: James ParksThe people who teach our children, protect us from crime, put out fires in our homes and make sure our water is clean are under attack. Conservative pundits and politicians across the country are using the economic crisis to attack public employees and portray them as privileged compared with everyone else. They use the fact that public employees, many of whom are union members, have been able to keep their well-funded pensions, reasonable hours and decent pay to stir up rage from those who have lost these benefits in the private sector.

Many cash-starved state and local governments have used these same arguments as a cover to cut services, personnel and pension benefits to balance their budgets and weaken unions.

Several new studies should put those arguments to rest. The Economic Policy Institute (EPI) found that state and local public employees are actually underpaid. In “Debunking the Myth of the Overcompensated Public Employee: The Evidence,” Rutgers University professor Jeffrey Keefe found that, on average, state and local government workers are paid 3.75 percent less than similar workers in the private sector.

The study also found the benefits that state and local government workers receive do not offset the lower wages they are paid. The differential is greatest for doctors, lawyers and professional employees, the study found. Read Keefe’s report here.

Public employees also work hard for their lower pay, often putting themselves in danger. According to the Center for Economic and Policy Research (CEPR), nearly two in five state and local government workers—more than 1.4 million— worked in either physically strenuous jobs or jobs with difficult working conditions. Notably, almost half (47.5 percent) of local government employees between ages 55 and 65 held such jobs. If the retirement age were increased, the report says, many of these workers, due to the physical challenges of their jobs, would have to leave the workforce before they are eligible for full retirement benefits. Read the CEPR report here.

Writing in the New York Daily News, Dan Morris of the nonpartisan Drum Major Institute for Public Policy says the attacks on public employees are absurd and dangerous.

…if public-sector workers become cheap, expendable labor, they will contribute less to the tax base and spend less, blunting private-sector job creation. A healthy public sector is just as good for the investment banker as it is for the unionized electrician.

EPI estimates that every 100 public-sector layoffs result in about 30 private-sector layoffs because the subsequent loss of income dampens consumer spending and thus weakens the economy. Says Morris:

The race to the bottom is a callous attempt to lower expectations for employment at a time when millions of people are counting on them to be raised. No victory worthy of the name can be achieved on those terms.

This article was originally posted on AFL-CIO Now Blog.

About The Author: John Petro is an urban policy analyst at the Drum Major Institute for Public Policy. He runs the Progressive Urban Model Policies (PUMP) Project, a first-of-its-kind initiative to organize and share best practices in policy design and implementation. His writing on urban issues has appeared in the San Francisco Chronicle and his recent research has been covered in Politico, The New York Times, Reuters, and other media outlets.

Keeping it Public (If the Libraries Don’t Sway You, the Blazing House Might)

Tuesday, October 5th, 2010

amytraub4Last week, the New York Times reported on Library Systems & Services, a private, for-profit company that an increasing number of towns are contracting to take over their local public libraries. The company pares budgets and turns a profit by, among others things, replacing long-term employees with those who will “work.” In the article, CEO Frank Pezzanite mocks “this American flag, apple pie thing about libraries” and ridicules the idea that “somehow they have been put in the category of a sacred organization.” The problem? Local residents seem to believe there is something all-American – and possibly sacred – about this community institution. I know where they’re coming from.

Public libraries represent the best of American tradition of local communities chipping in for the common good, while advancing democratic values of free inquiry and universal access.

Through our local libraries, we all contribute to create a public space where anyone can access the world’s outstanding literature, music, and film; popular entertainment; the fruits of human knowledge and insight; computer and internet access; resources for jobseekers and students; edifying speakers; programs that engage schoolchildren; and story hours that delight the youngest members of our community. I’m never going to check out that new Janet Evanovich novel (or, for that matter, Bill O’Reilly’s latest bestseller) but I’m damn glad my tax dollars paid for it to be available on the shelves. The common resource is bigger than any of our individual tastes.

Something of that is lost when a profit-driven company turns a community institution into a source of private gain. It’s not just the likelihood that public employees earning middle-class salaries will likely be turned out in favor of less experienced staff – although I’ve written in opposition to that as well. Rather, it’s the idea, articulated by American Library Association President Robert Stevens in response to the Times article, that for-profit libraries may not “remain directly accountable to the publics they serve.” Or, in the words of the late historian Tony Judt, “shifting ownership onto businessmen allows the state to relinquish moral obligations… A social service provided by a private company does not present itself as a collective good to which all citizens have a right.”

The point may be subtle when we’re talking about computers and books on a shelf (no matter how critical a part of democracy) but it’s hard to ignore a house on fire. This morning at Think Progress, Zaid Jilani describes the situation in Obion County, Tennessee, where fire services are funded by subscription fees rather than general tax revenue. Those who pay the fees can call the fire department to save lives and extinguish blazes. For those who can’t or won’t shell out for the service, Jilani’s headline says it all: Tennessee County’s Subscription-Based Firefighters Watch As Family Home Burns Down. Maybe there’s something to the “American flag, apple pie” thing about public services after all…

This article was originally published in DMI Blog.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers.

Target Wall Street Greed, Not Public Employees

Tuesday, August 31st, 2010
Credit: Joe Kekeris

Credit: Joe Kekeris

Too often when economic times get tough, scapegoats are found in the wrong places. Wall Street greed and double-dealing sparked much of the nation’s recent near-financial collapse, yet many in the chattering classes instead are attacking public employees for this rolling recession.

Economist Dean Baker puts the situation in perspective:

Fifteen million people are not out of work because of generous public employee pensions. Nor is this the reason that millions of homeowners are underwater in their mortgages and facing the loss of their home. In fact, if we cut all public employee pensions in half tomorrow, it would not create a single job or save anyone’s house. The reason that millions of people are suffering is a combination of Wall Street greed and incredible economic mismanagement.

Even as a consensus is emerging among economists that the United States should put job growth ahead of deficit cuts, a new study focused on New England finds that the region no longer can afford to spend scarce resources on tax credits and other business giveaways. Instead, it needs to channel economic development efforts to rebuilding neglected infrastructure and improving education for people at all levels. “Prioritizing Approaches to Economic Development in New England” provides

ample evidence that infrastructure (roads, bridges, dams, energy transmission systems, drinking water, and the like) and education are effective approaches for creating jobs and generating economic growth.

The study, by the Political Economy Research Institute at the University of Massachusetts-Amherst, finds the New England states have too long viewed funding for public services and economic development as competing interests—and that’s a false dichotomy. Sounds like the study can apply to the rest of the country as well.

Demonizing the public sector harms the U.S. middle class, writes Drum Major Institute for Public Policy (DMI) Research Director Amy Traub, who reminds us how fundamental the jobs they do are to our everyday lives:

It’s easy to lose sight of the other ways that a strong public sector supports our economy. Middle-class Americans and the businesses they work for rely on good schools, clean and safe streets, and high quality public services and infrastructure. In so doing, they depend on the dedicated teachers, police, firefighters, librarians, sanitation workers, parks employees, and support staff that keep states and cities running.

States and cities face very real fiscal challenges, but the cause is falling tax revenue due to the deepest recession in decades—not excessive spending or lavish compensation for public workers.

Further, Traub has a recommendation for Congress, some Democrats included:

Trashing our middle class in an effort to cut costs is short sighted. Downgrading the middle-class pay and benefits of public workers only speeds their erosion in the private sector, undermining everyone who works for a living….Rather than attacking public pensions that afford retirees a middle-class standard of living, [lawmakers] should be thinking about how to increase retirement security for millions of private-sector employees with meager savings.

As Progressive States Network points out, extremist anti-worker organizations like the American Legislative Exchange Council have been trying to gut public employee pensions for years—and they are using the recession as a public relations platform.

There is no crisis in most state retirement systems, even according to the numbers of the researchers demanding state leaders take unneeded action to cut the incomes of retirees.  And despite the hype from a few carefully selected anecdotes of retirees gaming pension systems, the reality is that the overwhelming number of public employees receive pretty bare-bones benefits, in some cases not enough even to keep them out of poverty.

Corporate backed anti-worker groups are the winners when the public taps into public-employee blame game. Wall Street is another big winner. The CEOs of Big Banks and the financial industry are happy to see the finger pointed at public employees. It means America’s workers are fighting each other and not united in targeting the real culprit of our economic misfortunes.

This article was originally posted on AFL-CIO NOW Blog.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee (they were represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

The Terrible Public Pension Threat

Friday, August 27th, 2010

Natasha ChartIt’s time for a class war over public union pensions. So says Ron Lieber, writing in the New York Times. Okay, let’s rumble. What’s the score, so far?

Despite defined benefit (DB) pensions, like the ones public employees get, being more economically efficient [pdf] and offering better returns, private employers have mostly switched to 401(k) plans, or defined contribution (DC) plans [pdf], because they’re cheaper. Between 1979 and 2001, the portion of the workforce covered by defined benefit pensions dropped by half. By 2008, only 20 percent of private workers had such a pension.

Businesses saved a lot of money by either switching to low cost 401(k) plans or dumping their pension obligations on the government [pdf]. Did they use their savings to create jobs? Not lately. These days, businesses are firing more people than they need to and sitting on the cash.

If recent history is any guide, those business savings still won’t go to average employee wages, which have been stagnant since the 1970s when union membership started declining to its current 12.3 percent of the labor force. Since 1979, extra savings have gone to the richest 1% of Americans who’ve seen their income go up 281 percent, with CEO pay going up 298 percent as the value of the minimum wage dropped 9.3 percent in value, and the pay of manufacturing and maintenance workers had gone up by only 4.3 percent, as of 2005.

Clearly, the investor class won that round.

The rich were positioned to get richer, even during this recession. It isn’t that there’s no money, it’s that money has been steadily taken out of circulation to be uselessly hoarded by the top one percent of income earners. And now, with government revenues starved by tax cuts for the rich and wage declines for most everyone else, the proposed solution is to break pension obligations to the few people who still have them.

Funny how big a threat pensions are supposed to be, now that they’re so rare. Ha ha.

“Who took our pensions and what do we have to do to get them back?” – Rep. Alan Grayson at Netroots Nation, July 24, 2010

You can see how it would have been harder 50 years ago to attack pensions, as Lieber does, as an unjustified, “terrifying” and “titanic” waste of resources. More people would have agreed with Rep. Grayson’s statement last month that, “everyone who works in America for 30 years should have a pension,” because more of them had decent pensions of their own.

Now, pensions are almost surprising. And about that, Jonathan Cohn had the best next question, emphasis mine:

But ask yourself the same question you should have been asking [during the debate about auto worker pensions]: To what extent is the problem that the retirement benefits for unionized public sector workers have become too generous? And to what extent is the problem that retirement benefits for everybody else have become too stingy?

For their age and education level, public employees receiving pensions make less than comparable private sector workers. They may even be excluded from Social Security benefits, as Dean Baker points out, adding that they tend to make no more than $40,000 to $50,000 per year and that the shortfall in their pension funds comes to less than two percent of government spending over the next 30 years.

One thing that about half of all public employees do for their not-very-princely salaries is educate children. On that score, it’s hard to argue with Paul Krugman’s statement that, “Everything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial.” Not crucial enough to get them 281 percent pay raises, but crucial.

At present, 62 percent of US jobs now require some sort of special training beyond high school and in a decade, that might go up to 75 percent of jobs. Maybe some of these requirements are excessive, but it’s weird to hear anyone say we need less education.

Cut teachers’ lifetime compensation and, one way or another, less education is exactly what we’ll get.

And as for complaining about the pensions of all the other people who make less than their experience and education might be worth, our public police, fire department, emergency, maintenance, construction and engineering workers, you might as well come out in opposition to law and order and in favor of all the trains being late.

The pension alarmists would have us believe that the debate is about whether the public can afford to honor promises to retirees, which is bad enough. Though what it’s actually about is whether ordinary taxpayers should have to either pay for private schools, private bodyguards and private groundskeepers in private real estate developments, or accept that their cities and towns are going to keep falling apart around them because it isn’t anyone’s job to hold them together anymore.

Which is nothing less than a threat to price the average taxpayer out of all the benefits of civilization so that the top one percent of income earners won’t have to suffer the return of Clinton-era tax rates.

About the Author: Natasha Chart has been blogging about the environment, social justice and various other political topics since 2002. She currently writes at MyDD.com and works as an online marketing consultant in Philadelphia.

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